The most radical shakeup of policing for more than 30 years could end a ban on compulsory redundancies and introduce annual fitness tests for officers – with pay cuts for those who fail.

As well as challenging the police's "job for life" culture, it would open the way for recruits with business and military backgrounds to join senior ranks without having to start as a constable on the beat.

The recommendations form the second stage of an 18-month comprehensive review of police pay and conditions by the former rail regulator Tom Winsor, ordered by the home secretary, Theresa May.

Winsor said he wants to end the "blue collar" mindset that policing is an intellectually undemanding job similar to those of skilled manual workers who clock in and out. Unveiling his findings, he said: "We want the brightest and best to think of a police career on a par with the professions of the law and medicine."

Winsor acknowledged the working-class roots of policing but complained that the "attitudes of some police officers remain fastened in that mindset" when the skills and attitudes required "are distinctly above those of factory workers".

He said that mindset holds the police back and reinforces the lower social and professional standing associated with policing and police officers.

His recommendations claim to – alongside reforms of pay and working condition proposed in the review's first stage – deliver more than £1.9bn of savings over five years on the annual police pay bill.

The package, which is likely to provoke a strong reaction from police staff associations, includes:

• Increasing the pension age for all officers to 60. Officers currently retire after 30 years of service from the age of 50.

• Allowing chief constables to introduce compulsory severance across all ranks. Currently, only long-serving officers can be forced to retire on cost grounds.

• An annual fitness test for officers, with pay cuts for those who fail a timed 15-metre "shuttle run" more than three times. The review found that 75% of Metropolitan policemen are overweight or obese – more than the rate for the general population.

• A minimum educational standard of three A-levels for new recruits.

• Higher pay for more demanding officer and staff jobs.

• Performance-related pay with scales linked to skills and performance rather than length of service.

• An allowance to be paid for those officers working unsocial hours.

• Direct entry for recruits to be allowed at inspector rank and above to bring in fresh talent, with at least 80 places a year targeted at top graduates from the best universities. A similar direct entry scheme for the ranks of superintendent and above to attract skilled specialists from the military, security services, industry and business.

• A fast-track system in which a recruit could make inspector within three years instead of the current 17.

The report suggested cutting the starting salary for a constable from the current £23,500 to £19,000, or £21,000 for those with appropriate experience such as having been a police support officer or special constable.

Winsor said: "I do not accept that every officer must start as a constable and work his way through every rank before reaching the highest ranks. Policing is a vocation which is complex and evolving constantly."

Winsor said the next 30 years would not be like the past 30: "The existing pay system is unfair and inefficient. It was designed in 1920 and has remained largely unchanged since 1978. This is not about pay cuts but about pay reforms and pay fairness."

He said police officers were well paid, with salaries 10% to 15% higher than some other emergency workers and the armed forces, and 60% higher than average local earnings in regions such as Wales and the north-east.

Winsor said the annual fitness test was needed from next September because 65% of Metropolitan police officers and staff were either overweight or obese. The fitness levels of men in the police are far worse than women officers, with 75% of Met male officers and staff with body mass indexes higher than 25 – nine points more than the general population. Women police officers have much higher than average fitness levels.

Paul McKeever, chairman of the Police Federation of England and Wales, reacted strongly to the proposals, saying that without needing to turn a page of the 1,000-page report he knew that police officers believed they were under a deliberate, sustained attack from the government.

"Despite a growing list of demands and the reality of the cuts, they are doing their very best, but they know the government cuts are jeopardising public safety and the quality of service they are able to provide. The service cannot take any more; enough is enough."

But the Association of Chief Police Officers said it was time to reward individual talent and expertise and move away from pay being solely determined by rank and length of service.

Acpo's lead on workforce development, Peter Fahy, the chief constable of Greater Manchester, said: "Chief officers have been clear that we will need radical approaches to absorb the current and future budget cuts and maintain the protection of the public. At the same time we must not put in danger the core ethos of service and self-sacrifice in policing that has served this country well."